Speaking of my fellow gurus, our switchboards have lit up to warn that something big is looming. Even the oddballs who think stocks are headed much higher seem to agree that a punitive correction is long overdue. Although each of us would like to believe that the arrival time of whatever dreadnought is coming will precisely match our individual forecasts, last Friday’s Kabuki drama on Wall Street drove home the reality that none of us stands a chance of being exactly right.
What an extraordinary day it was — far freakier, even, than we have come to expect on a Friday. As the Dow Industrials steamed higher, Nasdaq stocks were getting savaged. The high-fliers in particular suffered a memorable drubbing, unable to lure buyers for most of the day. These behemoths have been egregiously misnamed The Magnificent Seven, but there is nothing magnificent about them at all; they are just flying pigs, bloated with enough hydrogen to levitate a million Hindenburgs. A cynic would say the zeppelin fleet’s smoking room is located in the Eccles Building.
Jackpotters Numbed
Call options went begging for bids on Friday as well, discouraging Rick’s Picks subscribers from even thinking about the ‘jackpot bets’ we sometimes make when stocks look ripe for a sudden mood change.
And then came the blitzkrieg! As the Dow rally went vertical, a thousand bogged-down stocks got caught in the vortex, rising like a spout to finish the day with miraculous, modest gains or little net change. The craziness was most intense in the final 30 minutes, demonstrating the remarkable agility of trade-desk lackeys who have mastered the tactic of rotating your hard-earned dollars from one flavor of the day to the next.
Repo Man Thwarted
It was Microsoft, the world’s most valuable company, that had led the way down. The software giant got sacked for a 3.5% loss on Thursday and was down an additional 2.5% at mid-session on Friday. In wealth-effect terms, this represented a loss of about $180 billion. But before the repo man could seize a single yacht or Cessna Citation, Microsoft trampolined exuberantly off its lows, pushing the Nasdaq and virtually all the lunatic stocks into one of the steepest, broadest ascents in recent memory. Presto! The alarming divergence between the Dow and nearly everything else was cured. It all happened in the final trading moments of the month, tape-painting so brazen as to make a joke of the SEC and other supposed “regulators” of securities markets.
The stock market may in fact be in a topping process. However, it has already grown sufficiently complex and drawn-out to moot the bombast of swamis who would claim to have foreseen whatever is coming. Even the Wharton-educated thieves who manipulate the markets don’t really know, and any pretense of knowing is just hubris.
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